Heinz's Beech-Nut Acquisition Heats up Competition in Infant Foods Category
Together, the two companies would represent approximately 24% of the U.S. prepared baby food category, compared to Gerber, which has nearly 73%. Currently, Heinz and Beech-Nut are regional players with minimal overlap in distribution on grocery shelves.
"Although we will still be a distant second to Gerber, a combination of Heinz and Beech-Nut will provide the critical mass to make the U.S. baby food market more competitive, innovative and dynamic," said Heinz president and CEO William R. Johnson.
Joe Jimenez, president and CEO of Heinz North America, explained: "This acquisition will give Heinz's North American infant feeding business added scale and national presence from which to drive innovation and category growth."
Johnson noted that a stronger Heinz/Beech-Nut combined baby food business will benefit the entire category in the U.S. "We have proven in countries such as the U.K. and Italy, where we have critical mass, that Heinz can grow the baby food category," he said. "Through product innovation, exciting marketing and consumer education, we have generated category volume growth in these and other global markets."
In addition to Milnot's Beech-Nut baby food business, Heinz will acquire the company's other branded and private-label businesses, including Milnot brand evaporated and sweetened condensed canned milk and Chilli Man brand canned chili.
Scott Meader, president and CEO of Milnot Holding Corporation, called the transaction, "the start of a new era of competition, innovation and growth" in the U.S. baby food market.
Milnot is privately held by Chicago-based Madison Dearborn Partners, Inc., a private equity firm with approximately $4 billion of assets under management.
Terms of the agreement were not released. The transaction is subject to the normal U.S. regulatory review.
Edited by Pam Ahlberg